I would like to begin by thanking you for taking our comments. I have a few general comments before I attempt to address any of the points raised in your "Background and Discussion" and "Request for Comments" sections. To summarize my position: how is it possible that in an era of rapid trading in which computers execute thousands (or more) trades per second on any given security, that it is not possibly to simply and succinctly state the exact number of short positions taken against a given security (including synthetic shorts)? Simply put, your short positions reporting website should include the following information, updated daily: total trade volume, total short volume, total volume of new short positions opened, and total number of short positions closed, with a net number of shares shorted for the day. This should be stated clearly and unambiguously. If I look at the data posted on your website, I should immediately be able to ascertain not only how many shares were shorted over the course of a given day for a given security, but also the net number of positions opened or closed--as well as the total number which remain open as of the close of the day. If the stock whose ticker symbol is "???" has 10 million total shares shorted as of the beginning of September 30, and then 15 million are borrowed with 12 million returned and 3 million new short positions created on October 1, then The data for October 1 should reflect that there are now 13 million shares sold short for ???. If a share is borrowed to be sold, but neither sold nor returned, this should also be included as a separate column of data. The column headers could be: ticker symbol, total trade volume, total short trade volume, total dark pool volume, total daily shares borrowed, total daily shares returned, total daily shares sold short, total daily short positions closed, and total cumulative shares sold short; and equivalent information for synthetic positions. A second suggestion: as of now, I find that it is fairly easy to find your reporting by date for all listed securities, but I think it should be made easier to obtain data for each individual security, e.g. a search function that allows users to find ticker symbol ??? and see all of the data compiled for that symbol only. I don't think it would be especially difficult to put a feature such as this on your website. If you have such a feature, then consider this to be an inadvertent comment on the ease of navigation of your site. Now I would like to address a few comments which you are more explicitly soliciting. Regarding whether the OTC equity securities should be reported: My recommendation is yes, however, I think that the data files should be separate from exchange-reported equity securities. Regarding Synthetic Short positions: My recommendation is that yes, these should be reported as such, and disseminated. Likewise, buying puts (without selling calls), and selling calls (without buying puts) are indicators of short sentiment, and it may be of some interest to know the extent to which institutions as opposed to retail undertake each action. But, I would settle for information on synthetic short positions--how many new synthetic short positions (specified as number of shares) are opened, how many are closed each day, as well as the average time-to-expiration of these new positions. Regarding dissemination of public float: This could be useful information for investors. Public float should at least be included for listed securities. Along the same lines, number of shares outstanding and number of shares authorized could be helpful information as well, although both of these latter two numbers are generally easy to obtain elsewhere. "FINRA requests comment on whether outstanding stock borrows by customers in arranged financing programs should be reflected in short interest reports" I think that I addressed this above. However, I would reiterate here: both the net number of shares actually shorted and the number of shares borrowed-but-not-returned should be reported. "FINRA is considering whether daily or weekly short interest position reporting would be preferable. What are commenters’ views on the preferred frequency of short interest position reporting?" Daily is preferable. "FINRA requests that firms provide detailed information regarding the feasibility of reporting short interest information to FINRA on a daily versus weekly basis." As I noted above, if we have the ability to make a transaction, then we can also track the transaction. "Do commenters believe that daily submissions, combined with a one-day reduction in firm turnaround time and a one-day reduction in FINRA processing time would be beneficial in providing more timely transparency regarding short interest position information? Why or why not?" Yes, this will be beneficial. Among other things, a part of the problem we see with naked shorting might be summarized as 'the right hand often doe snot know what the left hand has done.' Providing more timely information may help with this problem. "Do commenters believe that weekly submissions, combined with a one-day reduction in firm turnaround time and a one-day reduction in FINRA processing time would be beneficial in providing more timely transparency regarding short interest? Why or why not?" The reports should be made daily, but if the only way to get the information requested above is to get it on a weekly scale, then this is preferable to not getting the information at all. "Would a one-day reduction in both firm and FINRA turnaround times be beneficial (i.e., short interest information would be disseminated two days earlier), even with the current twice a month reporting schedule? " Yes. A lot can change in a week or two, and most securities have a time-to-cover of 1-2 days, as estimated by Ortex. With this in mind, ideally, the information would be updated daily and each day's update would pertain to the previous day's transactions. Thank you for your timely consideration of these suggestions.
James Sanders Comment On Regulatory Notice 21-19
I would like to begin by thanking you for taking our comments. I have a few general comments before I attempt to address any of the points raised in your "Background and Discussion" and "Request for Comments" sections. To summarize my position: how is it possible that in an era of rapid trading in which computers execute thousands (or more) trades per second on any given security, that it is not possibly to simply and succinctly state the exact number of short positions taken against a given security (including synthetic shorts)? Simply put, your short positions reporting website should include the following information, updated daily: total trade volume, total short volume, total volume of new short positions opened, and total number of short positions closed, with a net number of shares shorted for the day. This should be stated clearly and unambiguously. If I look at the data posted on your website, I should immediately be able to ascertain not only how many shares were shorted over the course of a given day for a given security, but also the net number of positions opened or closed--as well as the total number which remain open as of the close of the day. If the stock whose ticker symbol is "???" has 10 million total shares shorted as of the beginning of September 30, and then 15 million are borrowed with 12 million returned and 3 million new short positions created on October 1, then The data for October 1 should reflect that there are now 13 million shares sold short for ???. If a share is borrowed to be sold, but neither sold nor returned, this should also be included as a separate column of data. The column headers could be: ticker symbol, total trade volume, total short trade volume, total dark pool volume, total daily shares borrowed, total daily shares returned, total daily shares sold short, total daily short positions closed, and total cumulative shares sold short; and equivalent information for synthetic positions. A second suggestion: as of now, I find that it is fairly easy to find your reporting by date for all listed securities, but I think it should be made easier to obtain data for each individual security, e.g. a search function that allows users to find ticker symbol ??? and see all of the data compiled for that symbol only. I don't think it would be especially difficult to put a feature such as this on your website. If you have such a feature, then consider this to be an inadvertent comment on the ease of navigation of your site. Now I would like to address a few comments which you are more explicitly soliciting. Regarding whether the OTC equity securities should be reported: My recommendation is yes, however, I think that the data files should be separate from exchange-reported equity securities. Regarding Synthetic Short positions: My recommendation is that yes, these should be reported as such, and disseminated. Likewise, buying puts (without selling calls), and selling calls (without buying puts) are indicators of short sentiment, and it may be of some interest to know the extent to which institutions as opposed to retail undertake each action. But, I would settle for information on synthetic short positions--how many new synthetic short positions (specified as number of shares) are opened, how many are closed each day, as well as the average time-to-expiration of these new positions. Regarding dissemination of public float: This could be useful information for investors. Public float should at least be included for listed securities. Along the same lines, number of shares outstanding and number of shares authorized could be helpful information as well, although both of these latter two numbers are generally easy to obtain elsewhere. "FINRA requests comment on whether outstanding stock borrows by customers in arranged financing programs should be reflected in short interest reports" I think that I addressed this above. However, I would reiterate here: both the net number of shares actually shorted and the number of shares borrowed-but-not-returned should be reported. "FINRA is considering whether daily or weekly short interest position reporting would be preferable. What are commenters’ views on the preferred frequency of short interest position reporting?" Daily is preferable. "FINRA requests that firms provide detailed information regarding the feasibility of reporting short interest information to FINRA on a daily versus weekly basis." As I noted above, if we have the ability to make a transaction, then we can also track the transaction. "Do commenters believe that daily submissions, combined with a one-day reduction in firm turnaround time and a one-day reduction in FINRA processing time would be beneficial in providing more timely transparency regarding short interest position information? Why or why not?" Yes, this will be beneficial. Among other things, a part of the problem we see with naked shorting might be summarized as 'the right hand often doe snot know what the left hand has done.' Providing more timely information may help with this problem. "Do commenters believe that weekly submissions, combined with a one-day reduction in firm turnaround time and a one-day reduction in FINRA processing time would be beneficial in providing more timely transparency regarding short interest? Why or why not?" The reports should be made daily, but if the only way to get the information requested above is to get it on a weekly scale, then this is preferable to not getting the information at all. "Would a one-day reduction in both firm and FINRA turnaround times be beneficial (i.e., short interest information would be disseminated two days earlier), even with the current twice a month reporting schedule? " Yes. A lot can change in a week or two, and most securities have a time-to-cover of 1-2 days, as estimated by Ortex. With this in mind, ideally, the information would be updated daily and each day's update would pertain to the previous day's transactions. Thank you for your timely consideration of these suggestions.